The latest charge relates to a case when Benedict – in his previous incarnation as Cardinal Joseph Ratzinger – was in charge of the church's doctrinal enforcement institution, the Congregation for the Doctrine of the Faith, in the late 1990s. The New York Times obtained papers relating to the case which it says church officials had tried to keep private.

The newspaper alleges that Vatican officials including the future pope declined to discipline or defrock the priest, Father Lawrence Murphy, who was a teacher at a school for deaf children in Wisconsin for 24 years and was suspected of sexually abusing up to 200 boys.

The officials overruled pleas from US diocesan bishops and apparently dropped an instruction by Cardinal Tarcisio Bertone, then Ratzinger's deputy at the Congregation and now the Vatican's secretary of state, that the local bishops should initiate a secret canonical trial.

The Vatican appears to have accepted Murphy's plea, in a letter to Ratzinger in 1998, that he was dying, had repented and that the offences had occurred many years before and so were out of time. "I simply want to live out the time that I have left in the dignity of my priesthood," Murphy wrote. "I ask your kind assistance in this matter." The files contain no indication of a response; Murphy died a few months later.

The latest case is one of thousands forwarded over decades by bishops to the Congregation, which Ratzinger headed from 1981 to 2005. It is still the office that decides whether accused priests should be given full canonical trials and defrocked.

The documents that the church allegedly wanted to keep secret include letters between bishops and the Vatican, victims' affidavits, the handwritten notes of an expert on sexual disorders who interviewed Murphy, and minutes of a final meeting on the case at the Vatican.

Local police and prosecutors also ignored reports from his victims, according to the documents. During Murphy's time at the school, between 1950 and 1974, three successive archbishops in Wisconsin were told that he was sexually abusing children, but never reported it to criminal or civil authorities.

Instead of being disciplined, Murphy was quietly moved by the archbishop of Milwaukee, William Cousins, to the diocese of Superior, in northern Wisconsin, in 1974, where he worked freely with children in parishes, schools and, as one lawsuit charges, a juvenile detention centre, until his death.

The Vatican told the newspaper that Murphy had certainly violated "particularly vulnerable" children and the law, and that it was a "tragic case", but added that it was not informed about the case until 1996, years after civil authorities had investigated the case and dropped it.

It was not until 1996 that Cousins's successor as Milwaukee archbishop, Rembert Weakland, tried to have Murphy defrocked. After getting no response from Ratzinger, Weakland wrote to a different Vatican office in March 1997 saying the matter was urgent because a lawyer was preparing to sue, the case could become public and "true scandal in the future seems very possible".

Weakland, who resigned in 2002 after a scandal involving his relationship with a man and the disclosure that church money had been used to pay him a settlement, said that in 1998 he had failed to persuade Cardinal Bertone and other doctrinal officials to grant a canonical trial to defrock Murphy. He told the newspaper: "The evidence was so complete and so extensive that I thought he should be reduced to the lay state, and also that that would bring a certain amount of peace in the deaf community."

After Murphy died aged 72Weakland wrote a last letter to Bertone explaining his regret that Murphy's family had disobeyed his instructions that the funeral be small and private, and the coffin kept closed. Weakland wrote: "In spite of these difficulties, we are still hoping we can avoid undue publicity that would be negative toward the church."

In a statement rushed out by the Vatican's press office, Benedict's spokesman, Father Federico Lombardi, stressed that the allegations had previously been investigated by the civil authorities and that the future pope's decision only concerned a possible trial under canon law.

The Vatican said: "It is important to note that the canonical question presented to the Congregation was unrelated to any potential civil or criminal proceedings against Father Murphy." Since he was "elderly and in very poor health, and … was living in seclusion and no allegations of abuse had been reported in over 20 years, the Congregation for the Doctrine of the Faith suggested that the archbishop of Milwaukee give consideration to addressing the situation by, for example, restricting Father Murphy's public ministry and requiring that Father Murphy accept full responsibility for the gravity of his acts. Father Murphy died approximately four months later, without further incident."

It added that neither that directive "nor the code of canon law ever prohibited the reporting of child abuse to law enforcement authorities".